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Microsoft The Almighty Buck

Microsoft to Invest $1.7 billion in India 383

piyushranjan writes "Bill Gates has announced that Microsoft will invest $1.7 billion in India over the next four years to expand its operations. The fund would also be spent in making India a major hub of Microsoft's research, product and application development, services and technical support for both global and domestic companies. Microsoft plans to create 3000 more jobs at India, taking it's headcount at India to 7000."
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Microsoft to Invest $1.7 billion in India

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  • by madman101 ( 571954 ) on Wednesday December 07, 2005 @12:18PM (#14202697)
    how much money they are making in India now. I suspect this is just a reasonable investment for such a big market.
  • Re:MA and OpenDoc (Score:3, Interesting)

    by thinkmast ( 662468 ) on Wednesday December 07, 2005 @12:20PM (#14202729)
    Well...they had to catch up intel announcement yesterday that they are investing $1billion in india: http://www.indianexpress.com/full_story.php?conten t_id=83365 [indianexpress.com]
  • I wonder if . . . (Score:5, Interesting)

    by EraserMouseMan ( 847479 ) on Wednesday December 07, 2005 @12:23PM (#14202758)
    Demand will begin to outpace supply in India's IT sector causeing the price of IT skilled labor to increase. If so it will reduce India's competitive advantage and less Indians will see any advantage to coming to the USA.

  • Translator? (Score:4, Interesting)

    by Godeke ( 32895 ) * on Wednesday December 07, 2005 @12:24PM (#14202764)
    Of course India is going to be important: the US universities have finally been surpassed by several other countries in the creation of degreed workers. It only makes sense that a large population country that modernizes would be able to eventually do so. I think we are on the cusp of a real shift in power to Asia from the western countries.


    I never thought with so little product companies software services sector will grow so strong as it has grown here.

    Whisky Tango Foxtrot does that mean? I'm not pedantic about language, but that's just absurd. Perhaps the true impact of this shift will be the reduction of English to verb tense confused propaganda?
  • by 70Bang ( 805280 ) on Wednesday December 07, 2005 @12:29PM (#14202829)

    ...it won't improve their software quality. And, they'll have to rewrite each new version because the first one (codewise) will be like a frog in a blender. All of the pieces are there, but if you hope to improve it (for animals, let's think of gene splicing), you're either going to have to carefully put the pieces back together (by someone who isn't thirsty enough to drink a frogtini in the process) who can tell which piece goes where, or get another frog.

    Remember: you can get it fast, right, or cheap. Pick Two.

    It would appear the Microsoft Doctrine thinks they can achieve all three.

    "Success is a lousy teacher. It makes smart people think they can't lose."
    William Henry Gates, 3rd
  • by SatanicPuppy ( 611928 ) <Satanicpuppy&gmail,com> on Wednesday December 07, 2005 @12:32PM (#14202852) Journal
    I actually got the response, "You don't need to know that" once. Sure, it was a relief after waiting almost an hour to get through, to ask a question that SHOULD have been available on the company website (Dell) anyway, and THEN have the individual on the other end tell me that I didn't need to know, but by that point I WANTED to know, and BADLY so I could jsutify the chunk of my life I'd wasted!

    I still don't know, by the way. You'd think it'd be easier to figure out what an LED error code meant.
  • by WidescreenFreak ( 830043 ) on Wednesday December 07, 2005 @12:39PM (#14202916) Homepage Journal
    Can someone please explain to me why Microsoft feels the need to do this? Okay, application development is something that probably commands a higher salary in the U.S., but customer service?

    I have a really big problem with companies that continually fork out technical support overseas. Regardless of location, just about everyone will need to be trained and learn the products that they have to support. Americans are no less capable of this than anywhere else. But keeping tech support in the U.S. has many benefits with respect to customer service that I think outweigh the cost savings.

    Obviously, we have language difficulties when outsourcing. The Indian accent can be incredibly thick and very difficult to understand. I'm very adept at deciphering thick accents, but the Indian accent I find to be even more difficult at times than a thick, Scottish brogue. That certainly does not make the customer support experience any more pleasant.

    Additionally, technical support nowadays is often nothing more than reading down a checklist of "did you do this?" Yes, I did before I called. "Well, let's try it again." *groan* Fine. "That didn't work either? Then let's try this." Face facts - anyone can do checklists for troubleshooting. Why is that being off-shored?

    What's really infuriating about this announcement is that Microsoft is doing this as Louisiana and Mississippi are attempting to rebuild. You hear continual complaints about how companies are not moving back which can make sense from a manufacturing standpoint where large, capital investments of machinery and transportation need to be made; but from a services point-of-view, putting tech support and other business opportunities in Louisiana and Mississippi can still be cost-effective since those areas have incredibly low standards of living relative to the rest of the country. Then of course Microsoft would have the positive PR of (A) helping to rebuild an area that needs to be rebuilt, (B) having people who at least have an easier-to-understand (for the most part) accent on the other end of the line, (C) providing at least some type of jobs to an area that so desperately needs them, particularly now. Yes, I'm sure that hiring workers in LA/MS is still more expensive than India, but there's more to being a stable and respectable company than making the bottom line as large as possible. (I know, I know. Using "respectable" to represent Microsoft left a bad taste in my mouth, too.)

    Am I being too idealistic? Well, perhaps. (Hey, at least I admit it.) But it just seems that Microsoft is missing a major opportunity here to do some good right here at home just so save some money that, frankly, it doesn't need to stay afloat. Hell, how large was its profit last year?
  • by Amouth ( 879122 ) on Wednesday December 07, 2005 @12:39PM (#14202922)
    not to be rude but they could be doing what any other company with the chance would do... invest where they see growth and not have all the eggs in one basket. Just a thought
  • Re:Funny ... (Score:2, Interesting)

    by rovingeyes ( 575063 ) on Wednesday December 07, 2005 @12:52PM (#14203045)

    Somehow your statement implies that the computer science programs in India is florishing due to investments by the likes of Microsoft. You couldn't be more wrong. There is a reason why all these tech companies are moving their research divisions to India - availability of quality engineers with PhD. Computer Science has been and still is the most sought after program in India inspite of recent decline in enrollment or demand for it. I know this because I came through that system. In every college, it used to be the case where only top 2%-5% would only be eligible to get in to computer science. Now its a bit easier as there are more colleges to accomodate more students.

    Decline in American universities CompSci enrollment may be has little to do with outsourcing, but then again most of the outsourced jobs are plain programming type jobs not actual engineering level. Its plain fact that after the bubble people realized that it is no more that way to easy top dollar.

  • by digitaldc ( 879047 ) * on Wednesday December 07, 2005 @01:00PM (#14203121)
    If you are trusting the facts given by these sites:
    http://www.cia.gov/cia/publications/factbook/geos/ in.html [cia.gov]
    http://news.bbc.co.uk/2/hi/business/4436692.stm [bbc.co.uk]
    http://www.dqindia.com/content/top_stories/2005/10 5091201.asp [dqindia.com]
    http://www.x-rates.com/ [x-rates.com]

    From the BBC article, it is about 5344 pounds ($9300 US) annual salary for a software engineer in India. Take that money and you can hire about 182,000 workers in India or give every person in the country $1.50 (or a little less than a pound for 1,080,264,388 people.) Otherwise if you hire 3,000 new workers and pay them that avg. $9300 annual salary, you will still have $1.67 billion left over to invest elsewhere.
  • by Red Flayer ( 890720 ) on Wednesday December 07, 2005 @01:05PM (#14203163) Journal
    " The expanding into Asia and Europe is hardly synonymous with outsourcing."

    You're right, but the word you are looking for is offshoring, not outsourcing. If the product is being consumed here in the US, but made elsewhere by a company located in the US, that is offshoring. Outsourcing is something totally different, and doesn't apply to this .

    " The key markets for information technology in the next few decades are not the US, Western Europe or Japan'

    You mean, the key emerging markets. IT will still be bigger in the 'western world' + Japan for a while, but it's a lot more developed already, and has less opportunity for an entering player and/or initial sales.

    "So, as a manufacturer, you simply enter new markets by lowering your costs until the real masses, the billions, can afford your products."

    You mean, you lower your prices. Lowering your costs is not so simple, it doesn't automagically happen as a given over time. But, in essence, you are saying you need to lower your costs so you can lower your prices to be competitive in a poor market while maintaining profitability, right?

    "The answer to how it remains profitable is simple, volume."

    Again, not so simple. Yes, volume helps, since then fixed costs are diluted with respect to each unit sold. However, your marginal cost of each item sold doesn't change just because you increase your volume -- and labor, raw materials, and energy are not remotely free.

    What's really driving the prices of hardware down is a reduction in production cost, based on new manufacturing processes and new designs using cheaper raw materials.

    All increasing sales volume does is enable you to remain profitable while pricing your goods at a point closer to your marginal cost of production -- you can pretty much remove the cost of, say, administrative salaries, from your P&L analysis.
  • by korgull ( 267700 ) on Wednesday December 07, 2005 @01:07PM (#14203183) Homepage
    About the same experience here with working in China. I've been of and on the China for the past 8 years and form our Chinese devision we've never had the quality nor the planning that we managed to get in Europa.
    Currently our company is doing extremely bad.
    We moved most activities to China over the past 8 years and I've spend about 2.5 years in China. I've basically seen the company going to waste bit by bit.
    It's a pitty that it worked out this way because I also believe that with the correct plan and correct balance between work in China and work here it can be a success and profittable for all parties.Now both parties end up with a loss.
    Very strange is that no manager ever listened to the warnings that we send to them (we already saw this coming a few years ago and warned them many times). I'd call it mismanagement, but I guess these guys will find another explaination for this disaster :-)
  • by raddan ( 519638 ) on Wednesday December 07, 2005 @01:28PM (#14203408)
    If Microsoft is trying to influence legislation in India, thus making the market more favorable to itself, how is that a "free market"?
  • by Anonymous Coward on Wednesday December 07, 2005 @02:20PM (#14203846)
    I saw Microsoft's facility under construction in Hyderabad about two months ago. It was surrounded by tent cities of construction workers, mostly comprised of construction debris holding up blue tarps absconded from the site. Not to rap Microsoft, it's just the way the construction economy works on any project. Also, the workers are happy for the opportunity just to have a wage. Yet what a contrast to see a modern building as if growing out of a sea of tarps and destitution.

    In a land of have-nots, the have-nots don't blame the haves, instead they try to emulate. That was the biggest culture shock for me. I wasn't looked down upon because I have, instead I was admired for success. Success is a role model in India, not a point of contention.

    Regarding the good engineers vs. the mediocre ones, the sharp engineers will gravitate toward projects that offer the potential of rotation to the United States. They'll live on Ramam noodles and pocket their perdiem while here, then return home and break the cycle, able to invest in a home perhaps. As for the poor engineers, they won't land such possibilites, and tend to be the ones found when working strictly locally on outsourced projects. If Microsoft rotates workers, they'll get the sharp people. If there is no possilibity of temporary overseas assignments, they'll get the bottom pickings. Simple as that.
  • by Anonymous Coward on Wednesday December 07, 2005 @02:34PM (#14203986)
    Yeah, capitalism has done wonders for freedom in China or Singapore. China is very much running a capitalist economy now (even if it is centrally controlled, brutal, corrupt and not trustworthy [to an outsider like me, anyways])

    Freedom is not tied to any particular system of economy, but be my guest to prove that it is.

    I believe OPEN MARKETS contribute to the free flow of ideas, which (generally) leads to greater freedoms. But capitalism is its own goal -- it is not the same animal as liberty.

    Was the Hudson Bay Company, or India Tea Company capitalism at work? Is Amazon.com's policy of patenting whatever they can get approved (even ideas in widespread use before the company existed) - is capitalism at work? You can argue it is capitalism, but you can not argue such policies or laws support 'open markets'.

  • Re:I wonder if . . . (Score:4, Interesting)

    by gatkinso ( 15975 ) on Wednesday December 07, 2005 @03:12PM (#14204244)
    China already outsources some of its low end manufacturing to Vietnam citing lower labor costs.
  • by IAmTheDave ( 746256 ) <(moc.oohay) (ta) (ds-evademanesab)> on Wednesday December 07, 2005 @05:24PM (#14205265) Homepage Journal
    MS is not sentietn being. It has no freedoms or human rights to be given or taken away.

    * cough * wrong. well, at least according to the supreme court [reclaimdemocracy.org].

"Laugh while you can, monkey-boy." -- Dr. Emilio Lizardo